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2016 – A year for re-evaluating

As farmers head in 2016, an Ohio State University ag economist says they should be re-evaluating the machinery investments and other input costs they added during their more profitable years.

Barry Ward, Leader, Production Business Management in the Department of Agricultural, Environmental and Development Economics (AEDE) says the challenging economic environment in farming requires a closer inspection of return-on-investment.

“I’m not saying cut out the meat and the bone, but if there is some fat there, they really need to examine that, going into these next couple of years,” Ward said. “There’s going to be a period of time going through these low margin environments that there will be some weeding out, so getting a head of things, stress testing their balance sheets, working with their lenders, making sure that they have plenty of working capital.”

He says Ohio State University Extension has enterprise budgets available that can be used as a starting point for farmers in their budgeting process.